Genting HK warns of ‘significantly higher’ losses for 1H20

KUALA LUMPUR (Aug 4): Hong Kong-listed Genting Hong Kong Ltd has issued a profit guidance warning of a “significantly higher” net loss for the six months ended June 30, 2020 (1H20) versus the corresponding period in 2019, no thanks to the Covid-19 pandemic.

In a filing to the Hong Kong stock exchange yesterday, its chairman and chief executive officer Tan Sri Lim Kok Thay said the anticipated increase in the unaudited consolidated net loss of the group is due to the suspension of operations across the group’s cruise businesses, including Dream Cruises, Crystal Cruises and Star Cruises, suspension of shipbuilding operations at MV Werften’s shipyards in Germany, and severely restricted operations and revenue generation at its entertainment and leisure businesses — Resorts World Manila and Zouk, Singapore.

“It is expected that the Covid-19 pandemic will continue to affect the group’s businesses, as the spread and development of the virus has created significant uncertainty over when authorities in the relevant cruising markets will allow resumption of the cruise travel,” he said.

Moving forward, Lim said the company and the group will continue to monitor the evolution of the pandemic carefully and to keep the shareholders duly informed of any material developments as and when they arise.

For 1H19, Genting Hong Kong reported a net loss of US$56.6 million, versus US$141.27 million in 1H18.

Notably, in response to the Covid-19 pandemic, the group has undertaken a number of cost reduction, cash conservation and capital raising measures to deal with the resultant loss of revenues from its operations including reducing onshore operating expenses in respect of employee costs and overhead expenses, and reducing operating costs in respect of shipboard operating expenses.

Moreover, Genting Hong Kong is also suspending all capital expenditures other than that required to maintain the safety and security of its ships and the health and safety of its guests and employees, delaying delivery of Crystal Endeavor and Global Dream — under construction at its MV Werften shipyards — for about a year and improving the group’s debt maturity profile by securing a deferral of up to 12 months for principal repayments amounting to approximately US$220 million.

It is also seeking additional sources of finance from Germany’s Economic Stabilization Fund to fund the resumption of construction work at the shipyards and looking for additional sources of finance to maintain its cruise businesses pending resumption of sailing.

At 11.13am, shares of Genting Hong Kong settled at HK$0.48, valuing the counter at HK$4.11 billion. Year-to-date, the counter slipped some 38% from HK$0.77.

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